IRS Advised to Provide Better Guidance on Cryptocurrency Transactions

The Information Reporting Program Advisory Committee is a body which was established before the Internet was a major consumer network and is a result of federal government reorganization and, importantly, efforts to modernize and improve the IRS brought about by the Omnibus Budget Reconciliation Act of 1989. The committee periodically suggests actions the IRS needs to take in order to improve its operations, specifically relating to how the IRS gathers information about taxpayers.

This year’s public report is of interest to cryptocurrency advocates and participants because it specifically directs the IRS that it needs to be clearer on how it deals with Bitcoin and other cryptocurrencies.

In the past few years, with the innovative rise of technology throughout the financial sector, there has also been a rise in the popularity of investment in cryptocurrency. However, with the popularity of cryptocurency, there has also been an equal rise in questions as to the applicable tax…